Conventional Loan

Conventional mortgages are a common option for California homebuyers, offering fixed-rate terms such as 15 or 30 years and competitive interest rates. These loans are not insured by the federal government, which means the qualification requirements are more detailed compared to FHA or VA loans.

Who Qualifies for a Conventional Loan?

Conventional loans are available to a wide range of borrowers, including first-time homebuyers and those purchasing a second home or investment property. Most applicants will need:

• A steady employment history and documented income

• A minimum credit score of 620

• A debt-to-income (DTI) ratio of 45% or lower (in most cases)

Down Payment Options

While many believe a 20% down payment is required, that’s not always the case. Certain qualified buyers in California can put down as little as 3% with specific Conventional Loan programs.* However, if your down payment is under 20%, Private Mortgage Insurance (PMI) will be added to your monthly mortgage payment—though this can typically be removed once you reach 20% equity.

Understanding DTI (Debt-to-Income Ratio)

Your DTI is an important factor lenders consider when reviewing your application. It’s calculated by dividing your total monthly debt payments by your gross monthly income. Most Conventional Loan programs in California accept a DTI up to 45%, depending on your full financial profile.

What Is PMI?

Private Mortgage Insurance protects the lender in case of default when a borrower puts less than 20% down. The good news? PMI is not permanent. In most cases, it can be canceled once you’ve built up 20% home equity, potentially lowering your monthly payment.

Property Types

Conventional Loans in California are versatile and can be used for:

• Primary residences

• Second homes or vacation properties

• Rental or investment properties

This flexibility makes them a great fit for both personal and investment goals.

What You’ll Need to Apply

To streamline your application process, be ready to provide:

• Recent pay stubs, W-2s, and/or tax returns

• Bank statements and documentation of other financial assets

• Residential history for the past two years

• Valid government-issued ID and Social Security number

Apply Now for a Conventional Loan

Have questions? Contact us and speak with a licensed mortgage advisor—we’re here to help every step of the way.